You have an absolutely brilliant child who is six years old and will be attending a private college in twelve years. You know that a four-year college now costs at least $30,000 per year, including tuition, books, and room and board. The cost of sending a child to college has increased by 8 percent per year, and you believe this will be true for the next twelve years. How much will the annual tuition be when your child is eighteen?
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You have an absolutely brilliant child who is six years old and will be attending a private college in twelve years. You know that a four-year college now costs at least $30,000 per year, including tuition, books, and room and board. The cost of sending a child to college has increased by 8
percent per year, and you believe this will be true for the next twelve years. How much will the annual tuition be when your child is eighteen?
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- You have a brilliant child who is five years old and will be attending a private college in thirteen years. You know that a four-year college now costs at least $25,000 per year, including tuition, books, and room and board. The cost of sending a child to college has increased by 9 percent per year, and you believe this will be true for the next thirteen years. How much will the annual tuition be when your child is eighteen? Assume tuition is paid at the beginning of each year. How much money will you need to have in your investment account when your child begins college? (Hint: what is the present value of the four years of college tuition?) If you can earn 11 percent on a mutual fund investment during the next thirteen years, how much will you have to invest at the beginning of each year to have enough to send your child to college for four years? O Expected Annual Tuition = $72,376.77; Total amount of money needed to pay for four years of tuition = $252,312.72; Amount needed to…You have an absolutely brilliant child who will be attending a private college in 11 years. You know that a four-year college now costs at least $15,000 per year, including tuition, books, room, and board. The cost of sending a child to college has increased by 4 percent per year, and you believe this will be true for the next 11 years. How much will the annual tuition be when your child is 18?Your five-year old daughter has just announced that she would like to attend college. Your best guess is that it will cost approximately $25,000 per year for four years in tuition, books, rent, etc. for her to attend State College 12 years from now (first payment beginning on year 13). You believe that you can earn a rate of 9% on investment to meet this goal. a. If you were to invest a lump sum today in hopes of covering your daughter’s college costs, how much would you have to invest? b. If you now decided to invest annually instead, how much would you have to invest every year? (investment every year, years 1-12) c. You just learned of a $10,000 inheritance and plan to invest it in your daughter’s college fund (inheritance is available today at time 0). Given this new source of funds how much do you have to invest every year? d. Create a combo box that will switch provide the user with 5 different inheritance amounts ($8,000, $9,000, $10,000, $11,000 and $12,000)
- You are saving for the college education of your two children. One child will enter college in 5 years, while the other child will enter college in 7 years. College costs are currently $10,000 per year and are expected to grow at a rate of 5 percent per year. All college costs are paid at the beginning of the year. You assume that each child will be in college for four years. You currently have $50,000 in your educational fund. Your plan is to contribute a fixed amount to the fund over each of the next 5 years. Your first contribution will come at the end of this year, and your final contribution will come at the date at which you make the first tuition payment for your oldest child. You expect to invest your contributions into various investments which are expected to earn 8 percent per year. How much should you contribute each year to meet the expected cost of your children's education?You are saving for the college education of your two children. They are two years apart in age; one will begin college 15 years from today and the other will begin 17 years from today. You estimate your children’s college expenses to be $40,000 per year per child, payable at the beginning of each school year. The appropriate interest rate is 7 percent. Your deposits begin one year from today. You will make your last deposit when your oldest child enters college. Assume four years of college for each child. How much money must you deposit in an account each year to fund your children’s education?You are saving for the college education of your two children. They are two years apart in age; one will begin college 15 years from today and the other will begin 17 years from today. You estimate your children’s college expenses to be $45,000 per year per child, payable at the beginning of each school year. The annual interest rate is 5 percent. How much money must you deposit in an account each year to fund your children’s education? Your deposits begin one year from today. You will make your last deposit when your oldest child enters college. Assume four years of college.
- 26) You are saving for the college education of your two children. One child will enter college in 5 years, while the other child will enter college in 7 years. College costs are currently $10,000 per year and are expected to grow at a rate of 5 percent per year. All college costs are paid at the beginning of the year. You assume that each child will be in college for four years. You currently have $50,000 in your educational fund. Your plan is to contribute a fixed amount to the fund over each of the next 5 years. Your first contribution will come at the end of this year, and your final contribution will come at the date when you make the first tuition payment for your oldest child. You expect to invest your contributions into various investments, which are expected to earn 8 percent per year. How much should you contribute each year in order to meet the expected cost of your children’s education?you estimate that you will need about $80,000 to send your child to college in eight years.Y ou have about $35,000 now.If you can earn 20 percent per year,will you make it? At what rate will you just reach your goal?Assume the total cost of a college education will be $350,000 when your child enters college in 15 years. You presently have $67,000 to invest.What annual rate of interest must you earn on your investment to cover the cost of your child’s college education?
- The parents of a newborn baby would like to put money away today to cover 100% of the child's expected total 4 - years of college tuition. The first tuition payment is due exactly 18 years from today, and the next three payments are due at the end of years 19, 20 and 21. Suppose that the parents estimate that the cost of tuition will be $86,000 per year for the first three years, but that the fourth year's tuition will be $96,000. Which comes closest to the amount of money that needs to be set aside today if the interest rate is 6% ? A. $ 104, 719 B. $ 136, 639 C. $ 16,857 D. $ 113, 608 E. $ 198, 781You are saving for the university education of your two children. They are two years apart in age; one will begin university 15 years from today and the other will begin 17 years from today. You estimate your children's university expenses to be $45,000 per year per child, payable at the beginning of each school year. The annual interest rate is 7.5 percent. Your deposits begin one year from today. You will make your last deposit when your older child enters university. Assume four years of university. How much money must you deposit in an account each year to fund your children's education? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Annual savings $You are graduating in two years and are thinking about your future. You know that you will want to buy a house five years after you graduate and that you will want to put down $50,000. As of right now, you have 8,000 in your savings account. You are also fairly certain that once you graduate, you can go work in the family business and earn $32,000 a year, with a 5 percent raise every year. You plan to live with your parents for the first two years after graduation, which will enable you to minimize your expenses and put away $10,000 each year. The next three years, you will have to live out on your own, as your younger sister will be graduating from college and has already announced her plan to move back in the family house. Thus, you will only be able to save 13 percent of your annual salary. Assume that you will be able to invest savings from your salary at 7.2 percent. At what interest rate you need to invest the current savings account balance at in order to achieve your goal? (If…